Large Bills = Large Solar System

As years go by, the cost of residential solar installations has fallen dramatically. As the technology has developed, efficiencies have gone steadily upward and the price per watt of power has declined even more rapidly. Even still, any appreciable solar systems still costs in the thousands of dollars, and one large enough to power an entire home will inevitably reach into the tens of thousands.

Suzi R. of Coarsegold, California, would not let herself be dissuaded by those numbers, however. California has consistently suffered some of the highest electricity rates in the country. According to the U.S. Energy Information Administration, the state ranked ninth overall as of 2009. Through September 2011, EIA data shows that the state had moved up to seventh-highest in overall costs and eighth-highest in residential electricity rates.

Compared to the surrounding states, however, California’s energy prices look even more outrageous. While residents of the other states in the EIA’s Mountain and Pacific Contiguous regions averaged around 9.9 cents per kilowatt-hour through last September, Californians were paying 15.23 cents per kilowatt-hour.

That number is roughly 29 percent more than the national average and nearly 54 percent above the regional average. Californians’ electricity costs have risen rapidly as well. Just between 2010 and 2011 average residential electricity rates rose 3.3 percent.

For Suzi, all that added up quickly to mean $500 monthly electricity bills on average. At that level, thousands of dollars in investment seems much less difficult to justify. But paying the up-front costs of a residential solar installation can still prove difficult, with many families still struggling to recover from the recent financial crisis.

Both California and the federal government were able to ease the burden for Suzi, however. The U.S. offers a federal tax rebate worth 30 percent of the cost of a solar installation. On top of this, the Database of State Incentives for Renewables and Efficiency notes that California provides a variety of solar incentives from the California Solar Initiative tax rebate to net metering guarantees to a variety of smaller grant programs.

But even all of these solar incentives should not eliminate the up-front costs of a solar installation entirely. However, Suzi was lucky enough to make her switch after the state had already seen a major shift in solar financing. USA Today reports that California owes roughly one-third of its new solar capacity to the new concept of solar leasing. This system has solar installers adding solar systems for little or no up-front costs, instead charging a fixed monthly rate, essentially like a loan, until the system is paid off.

Between special financing and some sizable rebates, Suzi and California solar installer Real Goods Solar were able to put together a fairly massive ground-mounted solar installation. Composed of 44 panels, the system boasts a peak capacity of 10.34 kilowatts. The system is expected to produce around 18,842 kilowatt-hours each year, or enough electricity to run more nearly 2.8 average Californian homes, according to the EIA.

At that level of production, Suzi could expect annual savings of more than $2,800 if recent electricity rates hold. Of course, if trends continue as they have over the past decade, Suzi and most of the rest of the state can expect to see their electricity rates rising over the coming years and her savings will only grow larger. Added on top of this, the solar installation should reduce carbon dioxide emissions by more than 28,600 pounds each year, making it easy to understand why solar power has grown so popular in California over the past few years.

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